[Click eStock] "HYBE, Phase of Strengthening Mid- to Long-Term Growth Potential"

[Image source=Yonhap News]

NH Investment & Securities maintained a buy rating and a target price of 370,000 KRW for HYBE on the 26th, stating that although the stock price has been sluggish due to concerns over overhang (potential sell-off volume), the mid- to long-term growth prospects are actually strengthening.

Researcher Ihwa Jung of NH Investment & Securities explained, "The contract renewal with BTS has been successfully completed again, reducing uncertainties related to future activities. This renewal will also work favorably in future fee negotiations with distributors," adding, "This is because the sustainability of economies of scale through BTS has been confirmed."

She continued, "We are entering a phase where synergies from the acquisition of the U.S. label are becoming full-fledged. Attention should be paid to the success of Jungkook’s 'Seven' driven by localization strategies utilizing Ithaca, and the rapid growth in music sales following the acquisition of QC," and added, "When the U.S. girl group 'Dream Academy' debuts, synergies will become even more prominent, establishing them as a truly localized group that appeals not only to K-pop fandom but also to the general American public."

The researcher also noted, "Sharp growth in paid user metrics is expected due to SM artists joining Weverse and the launch of annual fan club membership sales," and said, "Full-scale monetization is anticipated with the insertion of advertisements in the year-end live function."

HYBE’s consolidated sales for the third quarter are expected to reach 521.2 billion KRW, a 17% increase year-on-year, and operating profit is forecasted at 67.6 billion KRW, an 11% increase, slightly exceeding market consensus estimates. Sales are expected to continue strong, supported by new releases from NewJeans (1.95 million copies), V (2.15 million copies), as well as the success of Seventeen’s Japan dome tour and best album. Additionally, music and concert sales from the U.S. subsidiary QC are expected to be reflected.

This content was produced with the assistance of AI translation services.